Alibaba's road to U.S. market starts with Brooklyn manufacturers

Alibaba's John Caplan speaks to small business owners at the company's inaugural Build Up event July 23 at Industry City.

As Alibaba prepares a big move into the U.S. market, the Chinese e-commerce juggernaut is looking first to Brooklyn—which officials say is a sign of the borough's growing modern manufacturing strength.

The company hosted its first U.S. outreach event last week at Industry City, shortly after announcing that it would allow U.S. companies to open digital storefronts on its Alibaba.com B2B platform. Previously, American companies were only able to purchase from the business-only marketplace.

For roughly $2,000 a year, Alibaba says it can offer small operations with little digital presence the chance to access a global market of more than 10 million international business buyers. But it first must convince those companies that its platform is worth joining. So why start that effort in Brooklyn?

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“Because I love the Brooklyn Nets,” joked John Caplan, head of North America B2B at Alibaba Group. “But number two, I care about us getting close to manufacturers and wholesalers who are building real businesses in their communities.”

Alibaba approached officials with the Brooklyn Chamber of Commerce a few months before the launch event last Tuesday, seeking a local partner for New York.

“We weren’t surprised they wanted to launch in Brooklyn,” said Samara Karasyk, interim president and chief policy officer of the 2,000-member chamber.

Part of the borough's appeal, Karasyk said, is its resurgence in manufacturing.

The city as a whole has hemorrhaged manufacturing jobs since its mid-20th Century peak employment level of about a million, reaching less than 100,000 during the recession.

But a recent report found that there are signs Brooklyn has stopped the bleeding and found some areas for growth. The city lost about 5,400 manufacturing jobs since 2011, a 7% decrease, according to a June report from the Center for an Urban Future. But, over the same period, Brooklyn’s manufacturing job total increased by 200 workers, roughly 1%.

The borough has 39 active startups focused in manufacturing, up 70% from 2013. There are 53 startups producing some type of food or beverage, and 30 startups designing or manufacturing clothing, according to the report.

“We have the talent, the people and the diversity of businesses and neighborhoods," Karasyk said. "That’s what makes Brooklyn such a known brand throughout the world.”

Alibaba it pitching its platform as a new way for those companies and other local wholesalers to take their products global. The Brooklyn Chamber’s partnership with Alibaba is still at a “launching point,” as Karasyk described it. But she said members certainly know the Alibaba name and have expressed interest.

Alibaba will also host outreach events in urban markets such as Los Angeles and Chicago. The company plans to market its U.S. manufacturers and wholesalers with “Grown in the USA” branding. Caplan added that the company may ultimately carve out a special “Made in Brooklyn” title for the borough, depending on the level in interest abroad.

“The Brooklyn name carries a lot of weight,” Karasyk said. “Our job with this partnership is to make sure businesses can take advantage of that weight.”

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